Working for the dole plan will simply not work

Work for the dole schemes are not the answer to job market programs. Photo: Bloomberg

Laura Tingle

The opening salvos in the tabloids had all the subtlety of the now infamous Israeli 10-minute warning missile.

Under headlines like “Bludgers’ era over” and “Bludgers demand cash to sleep in”, readers of News Ltd tabloid papers around the country were told last week “bludgers are refusing jobs and staying on the dole because they can’t be bothered getting out of bed for interviews, or work they are offered doesn’t suit their lifestyle”.

The only person quoted was Assistant Employment Minister Luke Hartsuyker, who on Monday released the exposure draft for the new employment services model to operate from July next year.

This outlined how most job seekers must look for up to 40 jobs a month, and that work for the dole will become the default plan for the long-term unemployed.

Under the scenario laid out by Hartsuyker and his senior minister Eric Abetz, if you become unemployed, you will have six months with no income support at all from the government yet you will be required to look for 40 jobs a month.

For the next six months, you might get the dole but you will also have to work for 15 to 25 hours while on “work for the dole”.

Just who the government consulted on its scheme is unclear.

It has not just been the welfare sector that is underwhelmed. Business is equally unimpressed.

Employers are horrified by the spectre of being bombarded with job applications from unqualified job seekers simply trying to fill their quota of applications in a week.

It also does nothing to address the skills shortages which everyone – including the government – complains about.

Positive approach ignored

A joint attempt by business, unions and welfare groups to find a more positive way of addressing long-term unemployment – which would work in everyone’s interests – have been largely ignored.

Just a month ago, the Business Council of Australia, the Australian Council of Social Services and the Australian Council of Trade Unions argued in a joint paper that new approaches were needed to sharply cut structural unemployment.

They noted mixed results from previous efforts to increase job search requirements and to introduce work experience and training programs.

A better option than the budget move to withhold the dole from young people, they said, would be to shift the focus to the demand side, supporting long-term partnerships with employers willing to take on and train disadvantaged job seekers.

The peak bodies argued for a redesign of job agency contracts, saying existing contracts were too short and did not give enough incentives to make it worth agents building relationships with employers.

Well, the new scheme does extend the contracts, and talks vaguely of a wage subsidy program, but it fails to embrace many of the peak bodies’ suggestions aimed at building links between employers and job agencies. Most importantly, it savages the funding for basic training.

Instead “work for the dole” has become the answer to all our job-market problems, with the community sector being volunteered to create and absorb many job seekers, with big barriers to employment such as language, literacy, skills and disability.

When confronted with empirical evidence that challenges the new policies’ underpinnings, Senator Abetz resorts to anecdotes which – coming from one of the government’s most senior cabinet ministers – are simply embarrassing in their ignorance.

Lot of opportunities

Abetz told ABC 24 “there are a lot of employment opportunities in our community, that are being undertaken by backpackers and 457 visa holders”.

Asked why, in those circumstances, the government did not simply stop 457 visa applications, he noted “in Melbourne, as we speak, there appears to be a shortage of bricklayers. Now it seems to me that is something that we as a nation shouldn’t have and that is where we are trying to enhance the employment requirements to ensure that people do apply for jobs that are available.”

Apparently we should just forget the years required to qualify as a bricklayer or that the new employment services system proposes to cut back funding for training.

Pressed on Lateline for evidence that work for the dole is the answer, the best he could do was note “anecdotal evidence of people, especially in the Howard era”.

Yet more rigorous evidence suggests work for the dole is often no more than an employment gulag which actually increases the time people spend jobless.

These findings pop up when you take a more rigorous approach than “it’s the vibe of the thing” by looking, for example, at the empirical work of Melbourne University Professor Jeff Borland, or evidence presented to a Senate committee in June.

Statistics on what had happened to job seekers three months after they finished various work programs showed very poor outcomes for work for the dole compared with other programs, the Senate was told.

In the 12 months to December 2013 only 36 per cent of job seekers finishing work for the dole had positive outcomes – that is employment or education and training – compared with 61 per cent who had been placed in training. It was even worse than outcomes for those on unpaid work experience (56.3 per cent).

Abetz said this week the idea should be to “get whatever job is available and then use that as the springboard to get into the job of your choice, especially keeping in mind that during this period of time, if you’re not in that employment, you are asking your fellow Australians to dig even deeper in their pockets to pay you for welfare in circumstances where there is a job available for you, but you simply are making the decision that that particular job isn’t good enough for you”.

And that is the point. This new policy actually destroys the idea of “mutual obligation” that originally underpinned work for the dole. People will be required to meet these job-seeking tasks without any support from the government.

A recent OECD paper found Australia already has the strictest job-search demands of any OECD country.

In all the talk this week, the presumption was the world is full of dole bludgers and there was no concession to the fact there are less jobs now for young people than before the 2007 global financial crisis. Again it seems the priority for government is kicking dole bludgers and not addressing labour market problems which might benefit us all.

Laura Tingle is the The Australian Financial Review’s political editor.

The Australian Financial Review

BY Laura Tingle

Laura Tingle, The Australian Financial Review's
political editor, has worked in the parliamentary press gallery in
Canberra for more than 25 years. Laura has won two Walkley awards and
the Paul Lyneham Award for Excellence in Press Gallery Journalism and
has also been highly commended by the Walkley judges for
investigative reporting.

BY Laura Tingle

Laura Tingle, The Australian Financial Review's
political editor, has worked in the parliamentary press gallery in
Canberra for more than 25 years. Laura has won two Walkley awards and
the Paul Lyneham Award for Excellence in Press Gallery Journalism and
has also been highly commended by the Walkley judges for
investigative reporting.